How this ‘first-ever' financial arrangement may have helped Nvidia and AMD secure licenses for selling AI chips in China
Nvidia
and AMD have received approval to sell their specially designed AI chips in China, but reportedly with an unusual condition. According to a new report, the Trump administration granted the
export licenses
after a "
financial arrangement
" was made. As part of this deal, both chipmakers have agreed to give the US government 15% of the revenue from their chip sales in China.
Citing people familiar with the situation – including a US official – The Finanacial Times reported that the agreement was finalised last week. Nvidia will share 15% of revenues from its
H20 chip
sales, while AMD will provide the same percentage from its
MI308 chip
sales. The official noted that the administration has not yet decided how the funds will be used.
The deal is a quid-pro-quo arrangement. Export control experts state that this is the first time a US company has agreed to pay a portion of its revenue to obtain export licenses, the report added.
However, the agreement aligns with a broader pattern in the Trump administration, where companies are pressured to make concessions—such as domestic investments—to avoid tariffs and bring jobs and revenue to the U.S.
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The Financial Times reported that the Commerce Department began issuing H20 export licenses on Friday, just two days after Nvidia CEO Jensen Huang met with President Donald Trump. The US official confirmed that licenses for AMD's China chip have also been issued.
Nvidia did not deny the arrangement, stating only, 'We follow rules the US government sets for our participation in worldwide markets.'
Experts debate over Nvidia H20 chip sale to China
While the US government has approved the sale of H20 AI chips to China, some experts have reportedly expressed concerns.
It is being argued that H20 AI chips are a 'potent accelerator of China's frontier AI capabilities' and would ultimately be used by the Chinese military. However, Nvidia has refuted these claims, saying that they are 'misguided'.
'While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race,' Nvidia said on Saturday.
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